Endow Iowa Tax Credit Program
Get credit(s) for creating lasting good.
Giving through the community foundation to the causes you care about is rewarding—in more ways than one. Your gift creates lasting change in the community, and the Endow Iowa Tax Credit Program offers you generous tax incentives to make it easier for you to give more for less.
Since 2003, more than $50 million has been invested in community foundations through Endow Iowa, improving residents’ lives both now and for years to come.
How does the Endow Iowa Tax Credit Program work?
The program provides state income tax credits to individuals, businesses, or financial institutions that donate money to a permanent endowment fund at a community foundation that meets national standards, like the Community Foundation of Northeast Iowa.
The tax credit is for
25% of the amount of the donation, up to a maximum amount of $100,000 credit per taxpayer.
Community members who give also are able to take advantage of the tax credits in conjunction with federal tax deductions.
How can Endow Iowa help you?
| amount of gift |
$10,000 |
|
| Endow Iowa tax credit |
$2,500 |
* |
| net federal deduction |
$10,000 |
** |
| Donor's federal tax rate |
35.0% |
*** |
| federal tax savings |
$3,500 |
**** |
| total tax savings |
$6,000 |
|
| net cost of gift |
$4,000 |
***** |
| * |
25% of the charitable gift made to a permanently endowed fund at a community foundation. |
| ** |
The entire amount of the gift is deductible on federal taxes. |
| *** |
Individual marginal tax rates vary. |
| **** |
Assumes that individual taxpayer utilizes Schedule A (itemized deductions) on their federal return. |
| ***** |
Gift appreciated securities and your net cost is even less. |
How much is available through the program?
Tax credits are offered on a first come, first served basis, with approximately $4 million available annually statewide. The tax credits can be claimed by individuals, businesses or financial institutions.
If tax credits are used up for the current year, applications will be processed on a first-come first-serve basis for the following year.
How does one apply for tax credits?
The Community Foundation has an application form we fill out and send to the donor to sign after the donor has made a gift to any permanent endowment fund at the Community Foundation (we currently have over 900 funds). This form is automatically sent to donors who make gifts of $250 or more.
Donors must request the form from the Community Foundation for gifts under $250. Once the donor has received and signed the form, the donor sends the form back to the Community Foundation of Northeast Iowa office. Upon receipt of the form from the donor, the Community Foundation signs the form and sends it in to the state.
The Department of Economic Development will then notify the donor via letter of the tax credit award and the year in which their tax credit may be applied. A copy of that letter is sent to the Community Foundation.
The actual tax credit benefit is realized when the donor submits their state income tax form, and claims the credit on their tax form
for the tax year their credit has been approved by the Department of Economic Development. The letter from the Department of Economic Development can be used by the taxpayer as back-up documentation for their eligibility for the credit.
Additional Information
The Department of Economic Development has prepared Administrative Rules for the Endow Iowa Tax Credit Program. The Rules are available through the Iowa Administrative Code Web site at
www2.legis.state.ia.us/IAC.html. The citation for the Tax Credit Rules is 261 Iowa Department of Economic Development, Chapter 47, Endow Iowa Tax Credits.
More information about the program including the tax credit application form and updated information on the tax credit status can be found at
www.iowalifechanging.com/endowiowa.
Qualifying Gifts
- New funds established in the individual's own name at a qualified community foundation (like the Community Foundation of Northeast Iowa).
These funds may be donor-advised, designated for specific organizations, scholarships, or unrestricted. A $5,000 minimum is required to establish a new fund ($12,500 for scholarships).
- Contributions of any amount to any eligible existing endowed fund at the community foundation meeting standards (like the Community Foundation of Northeast Iowa).